Investment Logic Company is a leading enterprise in the domestic explosion industry: Anhui Jiangnan Chemical Co., Ltd. is an absolute leading enterprise in the domestic industry. It became a subsidiary of Dunanji in 2011. It is a large-scale listed company integrating scientific research, production, sales and blasting services. The business covers the production of explosive equipment, blasting services and explosive deep processing. It mainly provides civilian blasting equipment and engineering blasting services for mining, infrastructure, urban demolition and blasting, etc., and is actively expanding emerging industries such as artificial intelligence. The explosion industry is still at the bottom of the boom range, and industry integration and transformation have begun: in the context of the “new normal” economy, the civilian explosion industry is currently still at the bottom of the boom range, and industry concentration has increased markedly. The curtain is about to open for accelerated integration of the industry and strategic transformation of the main business. The overall mine service solution opens up room for upgrading the main business: After years of intensive cultivation in the field of explosion production and service, the company has strong technical reserves and management qualifications. Through a horizontal and vertical industrial integration strategy and leveraging its technological advantages in intelligent production, it is expected to become a leading domestic supplier of new materials for civilian explosives and a new type of mine service provider integrating blasting services and optimizing comprehensive costs. Successful layout of the field of artificial intelligence: The company actively explores growth points in new fields based on the advantages of intelligence, digitalization and informatization. Due to the deep development in the field of intelligent manufacturing of blasting products in recent years, management realized the huge space in the future artificial intelligence market and gradually laid out the blue ocean market representing the future. Investment recommendations We believe that although the company's current industry prosperity is still in the bottom range, the company's future transformation direction is clear and the market space is huge. It is backed by the Group's strong support, and at the same time, the company itself has excellent quality. The second take-off in the next few years is worth looking forward to. In the valuation, we believe that the company's main business upgrade business is expected to develop smoothly, and the traditional business will remain stable. The company's EPS for 2016-2018 is estimated to be 0.049 yuan, 0.052 yuan, 0.054 yuan. The first coverage gives an increase in holdings rating. Risk The macroeconomy continues to decline, and the development of the artificial intelligence market falls short of expectations